RURAL VALUATIONS – NEW ZEALAND

Introduction
This Standard applies to all inspections carried out after 1 January 1994. It represents the views of the Council of the Institute and is recommended that the Standard be adopted by members as a principle of “best practice” for the valuation of all rural properties.
It applies to all valuations and inspections of rural properties, other than the specific exclusions set out below.
All valuations should comply with the general provisions of the New Zealand Institute of Valuers Valuation Standards.
Rural properties to which this Standard does NOT apply are those in respect of forestry valuations, small holdings, lifestyle blocks, traditional Maori land, and agricultural enterprises.

1.0 The Valuer’s Roles
1.1 The valuer’s roles are:
1.1.1 to advise the client as to the market value (see paragraph 4.1) at the date of inspection, or at any other (specified) date as may be
required by the client;
1.1.2 to advise the client as to the nature of the property (see section 3) and any factors likely to materially affect its value; and
1.1.3 if required by the client, to provide a certificate of valuation for insurance purposes.

 2.0 The Valuer’s Inspection

2.1 An appropriate physical inspection of the land and improvements it to be carried out in keeping with the requirement to assess the market value of the property.

2.2 Certificate of title, lease etc.
The valuer’s inspection is to include searching a copy of the certificate of title and, if appropriate, the lease or any other relevant title documents affecting the property to ascertain whether the provisions of such affect the value of the property.

2.3 Resource Management
The valuer’s inspection is to include ascertaining activities or resource consents held or to be obtained, in respect of the property, including existing and future resource management implications, other local government requirements, restrictions or other relevant matters under the Resource Management Act 1991.

3.0 The Valuer’s Report

3.1 The valuer is to supply the valuation in the form of a written valuation report. Where the client specifically requires a verbal report, the valuer should confirm the advice given in writing this written confirmation to include the statement of non-compliance in terms of paragraph 6.1.

3.2 A true copy of each valuation report together with the valuer’s workings, should be retained by the valuer for a reasonable period.

3.3 A written valuation report may either be a form report or a narrative report. It should be well presented in a logical and easily understood manner.
3.4 The following should be the minimum content of a written report (where appropriate):
3.4.1 A clear statement of the total value of the estate or interest held in the land that is the subject of the valuation.
3.4.2 A statement of the purposes and function of the valuation; and the source of the valuer’s instructions.
3.4.3 The effective date of the valuation.
3.4.4 The legal description, tenure, land area, lease terms and conditions (if any).
3.4.5 A clear and reasonably complete description of the property being valued, together with its general condition and development.
3.4.6 A clear statement of all matters relevant under the Resource Management Act 1991.
3.4.7 A clear and reasonable summary of the market conditions upon which the valuation is based.
3.4.8 Details as to the property’s situation or location, and advice as to the territorial or regional authorities within whose jurisdiction the property is located.
3.4.9 A summary of land use data including where appropriate:
– type of production
– highest and best use
– soils and climate
– land classification, including erosion or flooding limitations - altitude, aspect and topography
– noxious weeds and pests
– cover summary
3.4.10 In relation to pastoral properties details of livestock carried as at 30 June (or alternative where appropriate) with total stocking summarised on a stock unit basis where applicable, and production
details or output together with the source of the data provided. Productivity and carrying capacity should be related to district averages with comment on the standard of management where this varies from the norm.
3.4.11
i) In relation to horticultural properties where the income is based on the cropping of the plant with a life span excess of two years,
details of orchard or vine plantings including variety, age, root stock and net planted area;
and production details including yield and packout compared with district averages with comments on management practice where this varies from the norm.
ii) In relation to horticultural properties where the income is based on crops of less than two years duration, and arable properties, comment on rotation by variety, yields in relation to district averages; and management practice where this varies from the norm.
3.4.12 Where a significant stand of commercial forestry is established on the property include details of net stocked area, variety, age, planting density, and practicality of harvest.
3.4.13 Comments on the soil fertility status where known and the adequacy of any fertiliser programme followed in relation to the carrying
capacity or other productive measures, including the source of any information on fertiliser application history.
3.4.14 A clear statement of any matters which have been specifically excluded from consideration in arriving at the value of the property (See section 5.0).
3.4.15 Any matters which may affect the value of the property as disclosed to the valuer by a search and perusal of a current copy of the certificate of title, lease or other document, should be identified and commented upon in the report.

3.4.16 Where the valuer relies on information provided, this should be clearly stated in the report, together with the source of the information.

 4.0 The Valuation

4.1 Market value is the estimated amount for which the property should exchange on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.

4.2 The valuation should set out the value of buildings, other improvements, any fruit or timber trees, and the value of the land.

4.3 Where any valuation is determined by application of a capitalisation or discount rate, the derivation of the rate must be disclosed.

4.4 In all valuation updates the valuer should comment on any changes to the property as to condition, productivity, or management.

4.5 The valuation should state that it does not include Goods and Services Tax (if any) or other taxes.

5.0 The Valuer’s Record of Inspection
5.1 The valuer should make and retain legible notes as to his/her findings and, particularly, the limits of the inspection and the circumstances under which it was carried out.

6.0 Disclosure

6.1 The valuer is to state in the report if the valuation is not made in accordance with this NZIV Practice Standard and give reasons for such a departure.

6.2 Valuations which are completed under the authority of an Act of Parliament may under certain circumstances be exempt from the provisions of this NZIV Practice Standard.


Issued/Revised 1 January 1995



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